(Full commentary courtesy of Myles Zyblock, Chief Investment Strategist, Dynamic Funds)

VIRUS

•  The number of worldwide cases is approaching 2.8 million with over 190,000 deaths.
• Canada’s curve has yet to bend with a cumulative total of 42,000 cases, and a daily count at roughly 2,000 cases per day. This contrasts with much of the rest of the world, where daily case counts have been leveling off or declining.
• The summary results of a Chinese trial for Gilead’s treatment drug, Remdesivir, were disappointing. The company, and even a scientist involved in the trial, dispute the interpretation of this particular report. This didn’t help Gilead’s stock price, which dropped by over 10% immediately following the news.
• A number of European countries have started to reduce lockdowns in a slow and staggered manner. These include Austria, Norway, Germany and Switzerland.

ECONOMY

• The lion’s share of economic data reported over the past few days has been very weak.
• Survey data tracked by Markit highlight that major economies are under more downward pressure than during the Great Financial Crisis.
• The downward sloping labor cycle continues to weigh on consumer spending. UK retail sales declined 450 basis points to -4.1%, year-over-year, impacted by the worst month-over-month deceleration ever. U.S. new home sales dropped by 9.5%, year over year.
• U.S. weekly jobless claims rose by 4.42 million, bringing the five week total to 25.5 million and wiping out the entire 10+-year recovery cycle in just over a month.

POLICY MAKERS

• Canada’s federal government is providing forgivable loans for 50% of commercial rent for landlords of small and medium sized enterprises. Provinces will cover 25%, thus combined together with the Federal program should provide 75% coverage.
• The U.S. government passed a $484 billion relief bill that delivers emergency aid to hospitals and small businesses. This is the fourth in a series of coronavirus relief packages that have made their way through Congress in less than 2 months, totalling $2.7 trillion in federal funds.
• The European Central bank has loosened requirements, allowing lenders to use close to $300 billion in “fallen angel” bonds as collateral in order to access the central bank’s ultra-cheap liquidity pool.
•  Countries that still have the available room continue to reduce their interest rates. Russia, China, Turkey and Mexico were just a few of the countries to lower their policy-set interest rates this week. Globally, we’ve counted 17 rate cuts this month in addition to the 49 cuts in March.
•  The Bank of Japan is rumored to be considering the use of unlimited quantitative easing to support its yield curve control regime.

FINANCIAL MARKETS

• Global bond yields remain at historically depressed levels, held down by aggressive central bank policy action and worries about the health of the economy.
• Emerging market currencies are making new lows for the cycle, a reflection of ongoing concerns about the financial stability for this part of the world.
• Gold bullion threatened to surpass its mid-April high of $1742 before retracing some of the earlier gains made in the week.
• Global equity indexes spent the week in a consolidation pattern, largely absorbing the strong gains made since the late-March lows. Growth, and in particular, quality growth names have continued to lead the performance derby. Value equites are still having trouble finding a bid.